James v. Pinnix

• Decision Date: 10 June 1974
• Docket Number: No. 73-1866.,73-1866.
• Citation: 495 F.2d 206
• Parties: Jessie JAMES, suing in his own behalf and on behalf of all others similarly situated, Plaintiff-Appellee, v. James PINNIX, d/b/a Pinnix Used Cars, individually and as representative of all others similarly situated, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

495 F.2d 206 (1974)

Jessie JAMES, suing in his own behalf and on behalf of all others similarly situated, Plaintiff-Appellee, v. James PINNIX, d/b/a Pinnix Used Cars, individually and as representative of all others similarly situated, Defendant-Appellant.

No. 73-1866.

United States Court of Appeals, Fifth Circuit.

June 10, 1974.

Richard B. Wilson, Jr., Charles R. Gear, Francis S. Bowling, Jack S. Parker, Sp. Asst. Atty. Gen., Jackson, Miss., for defendant-appellant.

John L. Maxey, II, Barry H. Powell, John L. Walker, Jr., Community Legal Services, Jackson, Miss., for plaintiff-appellee.

Before BROWN, Chief Judge and GODBOLD and CLARK, Circuit Judges.

GODBOLD, Circuit Judge:

Jessie James, the appellee, bought a used Ford sedan from the appellant, James Pinnix, for $495. He paid $200 down¹ and signed a contract in which he agreed to pay off the balance at $15 per week. The contract provided that upon default by appellee the appellant could take possession of the car and sell it with or without notice. Appellee eventually stopped making payments,² and at the end of about a half-year the appellant repossessed the car via "self-help," towing it away from in front of appellee's house³ without first initiating suit or otherwise invoking official processes, and without affording appellee preseizure notice⁴ or opportunity to be heard. Appellee then brought suit, alleging a 42 U.S.C. § 1983 cause of action and 28 U. S.C. § 1343(3) jurisdiction. The District Court permitted the suit to go forward as a class action,⁵ ordered the car returned to appellee, and enjoined appellant from taking the car again without affording appellee prior notice and an opportunity for preseizure hearing, absent a knowing and intelligent waiver by appellee of his possessory rights. Also, the court declared Mississippi Code 1972 Ann. § 75-9-503^5a (§ 9-503 of the Uniform Commercial Code) void and unenforceable insofar as it authorizes summary seizure. Finally, the court enjoined appellant and the members of his class from further summary seizures.

On this appeal appellant urges that since repossession of collateral by self-help does not involve state action, appellee has failed to state a claim under 42 U.S.C. § 1983. Like the two circuit courts that have already considered the matter,⁶ we hold that there was no state action and therefore reverse.

Appellee has no federal right to redress for appellant's interference with his property interests unless that interference involved state action. To support the existence of state action appellee urges the applicability of the leading case of Hall v. Garson, 430 F.2d 430 (CA5, 1970), in which this circuit found state action in the behavior of a Texas landlady who entered a tenant's apartment without giving notice or resorting to official processes and seized goods to satisfy the tenant's past due rent liability. In Hall we held that

the action taken, the entry into another\'s home and the seizure of another\'s property, was an act that possesses many, if not all, of the characteristics of an act of the State. The execution of a lien, whether a traditional security interest or a quasi writ of attachment or judgment lien has in Texas traditionally been the function of the Sheriff or constable. Thus the challenged lien statute under whose aegis the landlady had acted vests in the landlord and his agents authority that is normally exercised by the state and historically has been a state function.

430 F.2d at 439 (footnote omitted). The Hall state function concept does not carry over to the present case with sufficient force to compel a finding of state action. In Hall the landlady seized goods to satisfy a debt arising out of an agreement having nothing to do with the goods. Such a taking closely resembles a seizure in satisfaction of a judgment —a function traditionally performed by a sheriff or other state agent. In the present case, by contrast, the appellant-creditor possessed and claimed no roving commission to extract appellee's goods to satisfy a separate debt. Rather, he had a specific purchase money security interest in a particular item, and he seized only that item. His action, moreover, was by long Mississippi tradition the sort of action performed by private persons, not state officials. See Commercial Credit Co. v. Spence, 185 Miss. 293, 184 So. 439 (1938). Finally, seizure by entry into a dwelling, in Hall a major decisional factor because it was deemed an indicium of state-like behavior, was absent from the instant case.

Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972), does not compel a holding of state action. There the Supreme Court rejected the argument that the Pennsylvania Liquor Control Board's pervasive regulation of a liquor-licensed private club amounted to such significant state involvement as to make the club's racially discriminatory guest policy state action.⁷ The Court also held, however, that application of a liquor board regulation requiring all clubs to adhere to their own constitutions and by-laws would result in invoking the sanctions of the state to enforce discriminatory rules in those instances where the private provisions required racial discrimination, and that therefore the regulation was enjoinable.

Appellee suggests that § 9-503 overtly encourages private interference by secured creditors with property interests in a manner analogous to the operation of the offending liquor board regulation. The analogy has some validity. One can erect an argument that § 9-503 backs up creditors in enforcing contracts providing for procedureless interferences with property interests just as the regulation in Moose Lodge backed up and gave effect to private clubs' racially discriminatory by-laws. We cannot avoid the force of the analogy by labelling § 9-503 "neutral" or by stating that it does not "encourage" creditors to interfere with debtors' property.⁸ Nevertheless, Moose Lodge is still distinguishable, because it involved racial discrimination, behavior that since Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), courts have come to look upon as very nearly malum in se. The outer boundaries of "imputed" state action have been charted primarily in race discrimination cases. We are unwilling to push out the frontiers still farther in a case devoid of racial overtones.⁹

The same consideration compels us to reject appellee's argument based on Reitman v. Mulkey, 387 U.S. 369, 87 S. Ct. 1627, 18 L.Ed.2d 830 (1966). There again racial discrimination was involved. Moreover, the indicia of state involvement were much stronger, because, as the opinion made clear, the purpose of the challenged state constitutional amendment was to authorize private discrimination in the transfer of real property where before it had been barred by statute.

A number of courts in § 9-503 cases have rejected debtors' Reitman contentions by holding that the UCC did not "create the right" to repossess via self-help, that the right flows exclusively from contract and was recognized at state common law. We prefer not to follow that line of analysis-by-characterization. See Judge Byrne's dissent in Adams, 492 F.2d at 338. Were we to follow it, the answer it would yield when applied to Mississippi law would be uncertain. There is a reasonable, albeit conceptual, argument that the Mississippi legislature intended Article 9 of the UCC to supplant preexisting law and that therefore the power to repossess flows from § 9-503 today even though it was recognized in pre-UCC Mississippi common law. Even setting that argument to one side, the fact is that Mississippi cases did not sanction self-help repossession except when provided for in the parties' contract,...